Comments On Article: Finally September!

I use YNAB for my ledger.  There is an annual fee after a free trial, but I know I save more than the annual fee each year by using YNAB.  Each month when I make my budget (plan) I fill in each category — it’s like a virtual envelope (my husband likes to call them buckets).  Each time I make a purchase — which is 95% by credit card these days — I enter it into YNAB.  It is immediately deducted from the budget  category while simultaneously being added to the credit card balance as money due.  As long as I enter transactions, I can’t make a mistake in terms of how much the credit card will be.  Like Ann W, I pay off the credit cards 100% in full each month, and have for 28 years now (credit card debt was the first debt we illuminated).  I don’t even think about it, the credit cards are set up to deduct the full statement total automatically on the payment date.  YNAB has an app, so at any point while out shopping I can check how much money is left in a category.  For example, if it is near the end of the month and I come on a great sale and want to stock up, I can quickly see how much is left in the grocery budget or if I have money in “grocery savings”.  I decided to do as Grandma Donna described and put my unspent grocery money from each month into a savings category that I can access for taking advantage of unexpected sales beyond my usual stocking up as we use pantry items.

Diamond A, 30 years ago I read that the average person spent 20% more when using a credit card.  Like you, I can’t imagine going back to all cash in envelopes, in part because some places don’t even take cash anymore and in part because some purchases are made online.  In the past people might have written a check and sent it in with a catalog order, but those days are gone.  So maybe most people are spending even more than 20% overall because they are disconnected from the fact they are spending real money.  When you think about, these days for most people money is just a concept and numbers on a screen, not something they see and touch.  Shopping online I think we are more likely to purchase things we don’t need — I know I have in the past!  Now I keep a list of things we need, compare prices carefully, and only purchase from the list.  Even with my little bit of sewing/hand crafts money, I make a list, so I don’t spend the money on fabric or yarn I don’t need and then maybe don’t have enough left for a treadle belt or thread.

This week my husband went to wash the car at the nearby self-wash car wash.  If you use a credit card it is $6 for a set amount of time — he’s found he can get two cars washed in that time if my son goes with him with the second car.  You can also use quarters to pay for smaller increments of time.  Since he was only washing one car, he used quarters.  He spent $3.50 in quarters to wash the one car, which is 50¢ more than if he’d been able to wash two cars at once for $6, but is $2.50 less than if he used a credit card to pay $6 to wash one car.  But my big point here is that almost everyone washing one car still chooses to use the credit card and spend $6.  If you use quarters for the smaller increments of time and end up using $6 worth of quarters, you get less time overall than if you had just paid the $6 to start with.  I think most people look at that and decide $6 is the better value per minute.  And it is — if you are going to use the full allotment of minutes.  But you don’t need the full allotment of minutes given with $6 for most cars.  Even with a larger car like a minivan or SUV, they might only need $5 worth of time.  Most people could save $1 - $3 by using quarters.  But here’s the other part of this — almost no one has quarters on them anymore.  The company running the car wash takes advantage of people not having quarters and makes extra money every time a person uses their credit card to pay $6 to wash a car that might have take $3.50 in quarters.

Kimberly F, you're absolutely right about money not seeming "real" and just numbers on a screen. I think that's what appeals to me the most about using a physical book to write my expenses down – I need to have categories and deliberately balance my books when I make purchases. I was too young for checkbooks by the time I was old enough to spend my own money but I think I can bring back some of that deliberateness in my own way. 

Ann W, that's sort of what I'm hoping to do – to be able to take a receipt and break it down into my different categories because trying to make "only toiletries" or "only food" purchases for the sake of my budget just isn't going to happen :)

Diamond A, It makes a lot of sense for you to have a time of writing everything spent in a ledger.  I would recommend having your ledger next to you when you consider making an online purchase, so you can check and see what funds you have available.  I commend you for making the effort — I’m a natural budgeter, but I know a lot of people for whom budgeting is really difficult.  They often say that it just doesn’t work for them, but I blame credit for that, because my guess is almost everyone could budget when the weren’t able to spend more than they had.  Spending more of the cash and coin in your pocketbook meant you coudln’t pay other bills, hence the envelope system and other ways of separating out the cash so you wouldn’t over spend

I make it easier to breakdown my receipt by putting like items together at checkout.  Ordering online you could printout your order and use that to do a breakdown.

I think it is essential to know where your money is going each month in order to make a budget.  It takes time to get into the habit of tracking expenses, but like any other positive plan in your life, a few weeks or months of doing and it will become your new ingrained habit.

Hello Everyone.  I just wanted to thank you all kindly for all the great stories and tips. I am a beginner here. I am researching the 1930s  right now. I was born in the 1970s. I plan to benefit from G. Donna's  beautiful blog. I am  very greatful to be a part of this forum .